A TOP secret report told Birmingham City Council that annual debts of nearly #8 million-a-year at the NEC could be wiped out if the venue's bid for a super-casino was successful.

The city's ruling cabinet vetoed the rival Blues Stadium Sports Village project in favour of the NEC after studying the report from KPMG, which warned that the council-owned exhibition centre was under increasing business threat from UK rivals.

According to the confidential document, the NEC - which racked up losses of #7.94 million last year - is outdated and in need of huge cash injections that a super-casino would bring.

But the revelation that this opportunity to erase debts was a major reason behind the council's backing of the NEC today brought a savage attack from defeated Blues boss Karren Brady.

"In their hearts, most council-lors know that the scheme offered by Blues is the best for regeneration and the best for the city of Birmingham.

"But in their blind pursuit to save the NEC - which they know is failing - the council leadership has voted for the suits rather than the people of this city. We fought the campaign properly with no favours from anybody. This was clearly never a fair fight."

The KPMG report, which cost the city council #75,000, compared and contrasted the NEC bid with one from Blues for a new stadium and Sports Village in Saltley.

Excerpts from the report, seen by the Birmingham Mail, warn that the NEC Arena could become a "redundant facility" if the rival Blues project had gone ahead.

The report says: "If the council backed the Sports Village scheme, the NEC and MGM claim that without investment to improve the facilities on offer at the NEC, the competition provided by other leading venues such as ExCel in London will become an increasingly difficult force to contend with.

"The NEC Arena may become a redundant facility if there was another local venue, such as the arena put forward under the Sports Village scheme, capable of staging large scale events such as concerts."

It adds: "The NEC is in need of significant investment in order to maintain its market share in a competitive market place and the development of the regional casino is expected to provide a significant contribution to this need."

The report highlights officially for the first time the NEC's reliance on the success of a super-casino bid against a background of major losses and increasing competition.

The 43-page report, and the response from the NEC bid to questions by KPMG which forms an appendix, constantly refer to the site's need for huge investment. The report goes on to compare the revenue potential of both the NEC and the Blues scheme.

It states that revenue from a super-casino at the NEC could be used to fund other regeneration priorities including the proposed stadium development at Saltley.

"Based on the potential revenue streams to the council presented by MGM Grand Birmingham, it may be possible that the Sports Village (excluding a regional casino) could be delivered using these funds."

She said: "There is already a plan in place to eradicate the deficit over ten years based on developing the core exhibitions business. Clearly a regional casino would enable us to do that a little faster but it's by no means the driving force behind our commitment to the project.

"The key strategic reason for pursuing a regional casino for the NEC is that we have a responsibility to the region to keep the NEC competitive and successful.

"Built to drive the local and regional economy it generates over a billion pounds and supports upwards of 18,000 jobs but is under competitive threat from newervenues.

"A regional casino is a proven and natural fit and would be a logical addition to our site. In addition it provides the opportunity to generate massive revenue for regeneration."